Newcrest culls Cadia costs into negative territory

The record AISC of negative US$6 ($7.83) per ounce of gold was due to higher copper prices and sales volumes, along with the timing of sustaining capital expenditure.

Newcrest stated that the record AISC was offset by operating costs due to the strengthening Australian dollar against the US dollar and increased refining and transport costs, and royalty and concentrate treatment.

The company produced 535,477 ounces of gold and 34,557 tonnes of copper in the December quarter across its operations.

This marked a 6 per cent increase to quarterly gold production, which was leveraged by reduced scheduled maintenance.

Cadia experienced a 1 per cent decrease in gold production to 194,088 ounces due to lower grades and recoveries.

Newcrest’s Telfer gold mine produced 98,855 ounces of gold in the December quarter which was 14 per cent higher than the pervious period.

Newcrest managing director and chief executive officer Sandeep Biswas said the December quarter results reflected strong operational performance.

“Our results for the December quarter were underpinned by a strong operational and safety performance together with significant advancements in our growth agenda and sustainability commitments,” he said.

In December 2020, Newcrest submitted an application to the Department of Planning, Industry and Environment for modification 14, which will increase Cadia’s processing capacity from 32 million tonnes per annum to 35 million tonnes per annum.

A renewable energy transition was also progressed in the quarter at Cadia with a renewable energy power purchase agreement, which will see Newcrest’s greenhouse gas emissions reduced by around 20 per cent from 2024.

The Havieron project in Western Australia is expected to enter commercial production within the next three years, Biswas added.

“In December 2020, we took a major step towards defining the potential of the Havieron project with the announcement of an initial inferred mineral resource estimate,” he said.

“In January 2021, the board approved funding to construct the box cut, exploration decline and associated infrastructure, following receipt of the necessary regulatory approvals to commence these activities.

“With work now well underway at the project, we see the potential of achieving commercial production from Havieron within the next three years.”